Mid 2019 Real Estate Market Performance Was Better Than Expected

2019 midyear market assessment

How has the metro Phoenix real estate market performed the first half of 2019? Better than expected.

It’s always easier to assess past performance of the real estate market than it is to predict future performance (thanks Captain Obvious!). However looking at recent and current market data is one of many important factors in making predictions that are likely to be on point. Mid-Year is always a good time to evaluate not only what IS happening, but also to help in setting expectations for the rest of the year. Additionally, it provides a lens through which we can determine how close we came to accurately predicting the first half of the 2019 market. And what do we see? The attached graphic shows that the mid 2019 real estate market performance was better than expected. 

A desperately needed increase in listings, though smaller than we anticipated, helped tremendously. We’ve seen buyers who’d been waiting for the right time to buy, jump in. They’ve been spurred on by lower interest rates than we expected for the first half of 2019 and a renewed sense of confidence that they will find a great home. And while an analysis of the numbers is necessary to understand the market, talking to the “boots on the ground” is important too. Full time agents and brokers can provide supplemental insight into what’s happening. And for this full time broker, it’s been a pretty wild spring. One of my listings in Gilbert received 47 showings in the first weekend and received 8 offers. And while not all price points and locations are seeing that type of activity, a property valued under $325,000, in most markets, is a hot commodity. Despite that example, I am also seeing buyers have more to choose from. And due to increased supply, they are feeling a little bolder in asking for things like seller concessions or credits for repairs.

While the market has brightened a bit for buyers, it’s not nearly as impactful as we’d feared for sellers. Given the increase in supply, it makes sense to expect that price appreciation would slow to a certain extent. The predictions were that the 7-9% annual appreciation we’ve been seeing over the past 3 years would slow to a normal 3%, leveling the playing field between buyers and sellers. And we have seen a slow down in appreciation in the 2019 Phoenix real estate market. Yet, according to Michael Orr of the Cromford Report,  the median sales price is up 5.9% to $270,000 in the Greater Phoenix area. I would be surprised to see that continue and do stick by my prediction that appreciation will return to a normal (and still healthy) 3% per year.

“Now is the time to sell”….”Now is the time to buy”, is a frequent response real estate professionals will give when asked how the market is doing. If they can’t explain why buyer or selling is a good idea in the 2019 Phoenix real estate market, then that response may be more about helping themselves than giving you sage wisdom that can help you make good decisions. If you are a buyer looking to purchase between now and the end of the year, your timing could be very good. As interest rates continue to stay around the low 4’s and supply continues to improve, buyers will be in a better position to negotiate a fair deal. Sellers who feared that the slowing market would result in reduced sales prices, can be rest assured that they remain in a good position to net more now than in the future when interest rates do eventually rise and buyers become more anxious and less motivated.

 

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